Related papers: Subjective Expected Utility and Psychological Gamb…
To study the assumption that the utility maximization hypothesis implicitly adds to consumer theory, we consider a mathematical representation of pre-marginal revolution consumer theory based on subjective exchange ratios. We introduce two…
Although the definition of what empathetic preferences exactly are is still evolving, there is a general consensus in the psychology, science and engineering communities that the evolution toward players' behaviors in interactive…
Ergodicity describes an equivalence between the expectation value and the time average of observables. Applied to human behaviour, ergodic theories of decision-making reveal how individuals should tolerate risk in different environments. To…
We provide an axiomatic characterization of lexicographic preferences over the set of all random availability functions using two assumptions. The first assumption is strong monotonicity, which in our framework is equivalent to the strong…
Cooperative game theory has diverse applications in contemporary artificial intelligence, including domains like interpretable machine learning, resource allocation, and collaborative decision-making. However, specifying a cooperative game…
Sets of desirable gambles constitute a quite general type of uncertainty model with an interesting geometrical interpretation. We give a general discussion of such models and their rationality criteria. We study exchangeability assessments…
Criticisms of so called `subjective probability' come on the one hand from those who maintain that probability in physics has only a frequentistic interpretation, and, on the other, from those who tend to `objectivise' Bayesian theory,…
Since Leonard Savage's epoch-making "Foundations of Statistics", Subjective Expected Utility Theory has been the presumptive model for decision-making. Savage provided an act-based axiomatization of standard expected utility theory. In this…
We discuss the coherence properties of Expected Shortfall (ES) as a financial risk measure. This statistic arises in a natural way from the estimation of the "average of the 100p % worst losses" in a sample of returns to a portfolio. Here p…
We define notions of cautiousness and cautious belief to provide epistemic conditions for iterated admissibility in finite games. We show that iterated admissibility characterizes the behavioral implications of "cautious rationality and…
Constant and symmetric price impact functions, most commonly used in agent-based market modelling, are shown to give rise to paradoxical and inconsistent outcomes in the simplest case of arbitrage exploitation when open-hold-close actions…
This paper makes a small step towards a non-stochastic version of superhedging duality relations in the case of one traded security with a continuous price path. Namely, we prove the coincidence of game-theoretic and measure-theoretic…
There is a sudden surge to model human behavior due to its vast and diverse applications which includes modeling public policies, economic behavior and consumer behavior. Most of the human behavior itself can be modeled into a choice…
The minimization of some multivariate risk indicators may be used as an allocation method, as proposed in C\'enac et al. [6]. The aim of capital allocation is to choose a point in a simplex, according to a given criterion. In a previous…
Mutually exclusive decisions have been studied for decades. Many well-known decision theories have been defined to help people either to make rational decisions or to interpret people's behaviors, such as expected utility theory, regret…
The random utility model (RUM, McFadden and Richter, 1990) has been the standard tool to describe the behavior of a population of decision makers. RUM assumes that decision makers behave as if they maximize a rational preference over a…
Observable games are game situations that reach one of possibly many Nash equilibria. Before an instance of the game starts, an external observer does not know, a priori, what is the exact profile of actions that will occur; thus, he…
Human behavioural patterns exhibit selfish or competitive, as well as selfless or altruistic tendencies, both of which have demonstrable effects on human social and economic activity. In behavioural economics, such effects have…
Ergodicity economics is a new branch of economic theory that notes the conceptual difference between time averages and expectation values, which coincide only for ergodic observables. It postulates that individual agents maximise the time…
Gilboa and Schmeidler's (1989) uncertainty aversion plays a central role in decision theory and economics, yet many inconsistent behaviors have been observed in experiments. Motivated by this, we study an axiom postulating a minimal degree…